II CLASSIFICATION OF NEW BUDGET ITEMS OR EXISTING ITEMS FOR WHICH THE LEGAL BASIS HAS CHANGED

1.   New budget items and the expenditure relating to them shall be classified having regard to the data set out in Section I hereof by agreement between the two institutions which make up the budgetary authority, acting on a proposal from the Commission.

2.   The preliminary draft budget shall contain a reasoned proposal for the classification of each new budget item.

3.   If one of the two institutions which make up the budgetary authority is unable to accept the Commission's proposal for classification, the disagreement shall be referred to a meeting of the Presidents of Parliament, of the Council and of the Commission, which shall undertake the chairmanship.

4.   The three Presidents shall endeavor to resolve any disagreements before the draft budget is established.

5.   The Chairman of the tripartite dialogue shall report to the interinstitutional conciliation meeting, which precedes the first reading by the Council and shall, if necessary, speak in Council and Parliament debates on the first reading.

6.   The agreed classification, which shall be considered provisional if the basic act has not yet been adopted, may be reviewed by mutual agreement in the light of the basic act when it is adopted.

III INTERINSTITUTIONAL COLLABORATION IN THE CONTEXT OF THE BUDGETARY PROCEDURE

1.   The discussion of Parliament's views on the Commission's preliminary draft budget, which is scheduled to precede the Council's establishment of the draft budget, shall be held early enough for the Council to be able to give due weight to Parliament's proposals.

2.    a. If it appears in the course of the budgetary procedure that completion of the procedure might require agreement on fixing a new rate of increase in relation to non compulsory expenditure for payment appropriations and/or a new rate for commitment appropriations (the latter rate may be at a different level from the former), the Presidents of Parliament, the Council

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